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NECIC May 15th, 2007

Nestlé Purina PetCare Quimperlé (France) Update. NECIC May 15th, 2007. QUIMPERLE : CONTEXT OF THE PROJECT. To remove multiserve can capacity in France as the market continues to decline (circa 9.5% decrease / year from 1999 – France Grocery)

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NECIC May 15th, 2007

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  1. Nestlé Purina PetCareQuimperlé(France) Update NECIC May 15th, 2007

  2. QUIMPERLE : CONTEXT OF THE PROJECT • To remove multiserve can capacity in France as the market continues to decline (circa 9.5% decrease / year from 1999 – France Grocery) • Quimperlé Wet is quite more expensive than the other plants, even at the same level of utilisation. • With the volume declining (20 KTons to produce in 2007 compared to 100 KT in 2001), the conversion costs 2007 are double vs 2005 • Quimperlé Dry is the smallest dry plant of NPPE which makes simple dog products in simple packaging • Quimperle Dry is more expensive than Marconnelle even at the same level of utilisation (+ 31%)

  3. QUIMPERLE : SUMMARY OF KEY EVENTS • Nov 2005: NPP announced its project to sell Quimperlé (wet and dry facilities). • 2006: the Central Works Council (CWC) developed its project to avoid the sale. • In Dec 2006, NPP explained the reasons why it cannot accept the CWC’s project and invited twice the Unions to discuss the future of the Quimperlé site. Unions refused the invitation twice. • CWC meeting called for 21 March 2007 to discuss NPP’s project for the Quimperlé site. Proposed agenda: • Development of Dry facility with an investment of 12 millions € • The canning production will be transferred to Aubigny (France), Castiglione (Italy) and Ijmuiden (Netherland) • Social measures with some pre-retirement plan, internal mobility and voluntary leavers options. During this meeting, the CWC agreed a timetable of 3 informal meetings to find an agreement on the solution. • End of April, these meetings resulted in an agreement signed by all Unions and the CWC

  4. MAIN POINTS OF THE AGREEMENT • End of canning production 30 June 2007, and transfer in other NPPE locations ; • Transfer of employees from wet to dry activity on 1st July 2007 ; • 7 days working in Dry through a formal agreement ; • 138 jobs in Dry (including 5 Europeans) ; • Pre-retirement program at age 52 and beyond, 31 December 2007 (70 employees) ; • Voluntary leavers and potential redundancies : improved conditions ; • Timetable of the consultation : all meetings during the month of May With all these measures, the potential number of redundancies is expected to be very limited.

  5. THE INDUSTRIAL PROJECT • Quimperlé site stays within Nestlé ; • Transfer of the canning production to other NPPE sites. • Quimperlé site will be developed as a dry facility, supported by an investment of 12 millions € ; • Production will increase from 31 Ktons / year (current) to 95 Ktons / year (7 days working). SNC technology will be installed • The steps, following end of the consultation process (end of May): • 1st month : order of a large bag packing line • 5th month : detailed project finalised for the second line investment • 8th month : 7 days working on current production line (with the additional packing line), full year expected capacity circa 50 kt • 23rd month : 7 days working 2 production lines, full year expected capacity circa 95 kt

  6. THE CANNING RESOURCING PLAN

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